Similar to “force majeure”, force majeure is a contractual provision that exempts the parties from performance due to unforeseen and unavoidable events. Unlike “force majeure,” force majeure is known to include pandemics, wars, and other man-made events. The two laws are closely related in their meaning and use, but it is much easier for a court to dismiss “force majeure” in situations where human decision-making plays a role. An act of God can mean many things to many people. But what does this mean legally? Our litigation group examines the many ways in which “force majeure” in legal contracts has been interpreted by law and jurisdiction. Although the fire occurred across the Atlantic 159 years ago, the legal implications are still present in Canada, especially as the COVID-19 pandemic forces major events to be cancelled. “Over the next five to 10 years, we will see an evolution in the evolution of force majeure clauses and their association with pandemics. And then we know exactly what to do in the next pandemic,” she said. In addition, global pandemics are incredibly rare, meaning there is no existing case law on whether pandemics and virus outbreaks are considered a case of force majeure.

As things stand, a number of factors could influence how it is treated in a particular case. Individuals who have not been able to fulfill their contractual obligations due to circumstances related to the coronavirus pandemic can argue that the unknown and unexpected phenomenon has hindered their ability to fulfill their contracts. And since the circumstances were unknown and unpredictable, they should be considered an act of God. Forescout Technologies, Inc.c. Ferrari Grp. Holdings L.P., No. 2020-0385 (Del. Ch. Historically, courts have actually defined “force majeure” as including illness. See e.B. Herter v.

Mullen, 159 N.Y. 28, 37 (1899) (“The inability of a party to do the certain thing or perform the contract due to illness is considered a disability due to force majeure.”); Love v. Barnesville Mfg. Co., 19 Del. 152, 50 A. 536, 537 (Del. Super. Ct.

1901) (“The defendant would not be liable for damages caused solely by a case of force majeure, such as.B. an outbreak of disease in the defendant`s factory. »). Each part of this definition is discussed in more detail below. The body of jurisprudence of the Act of God can be as confusing and unpredictable as The Actions of God Himself. Where is COVID-19? There is a lack of competence that interprets the language of force majeure in the context of pandemics or virus outbreaks. There is no doubt that parties whose contractual performance has been hindered by the coronavirus pandemic will invoke force majeure as a contractual or habitual defense, arguing that an unknown and unexpected natural phenomenon has occurred, so their non-performance of a contractual obligation should be excused. Meanwhile, parties who want to enforce contracts or impose liability can assume the economic consequences of the outbreak, arguing that the real crippling force was not the coronavirus, but its economic impact. An indication of the direction in the drafting of the contract may be the other events listed as force majeure: many courts that interpret the provisions on force majeure will rely on the specific examples of force majeure events to simplify the interpretation of broader terms, such as . B force majeure. Therefore, the decision as to whether a pandemic or virus outbreak can be a case of force majeure could depend on the other misfortunes that the parties have imagined to excuse obligations under the contract. In any case, it depends on the details of the language of the contract, the circumstances of non-performance and the degree of avoidance.

What about certain legal outcomes? Only God knows. Alston & Bird has formed a multidisciplinary working group to advise its clients on the business and legal impact of the coronavirus (COVID-19). You can see all our work on the coronavirus in all sectors and subscribe to our future webinars and tips. In most contracts, she said, the language around force majeure is broad enough for the pandemic to be taken into account. However, Lam said he has seen a few rare examples of “very old” contracts with restrictive definitions where covid-19 may not apply. Since there is no overall FM doctrine in English law, the focus should be on the specific wording of the clause; Does the wording include the impact of COVID-19? Much will depend on whether the parties` approach was to list certain events and consequences that will constitute an FM event, or rather to describe general categories of events in a non-exclusive manner. While it may be unusual for FM clauses to explicitly cover the consequences of epidemics or pandemics, a more general common wording in FM clauses can be effective. Force majeure clauses are contractual provisions that reduce the liability of the party`s obligations if certain unforeseen and unavoidable events occur. They often involve a case of force majeure, but can also have a broader scope. Some smart lawyers may include pandemics and epidemics, workers` strikes, acts of war, and other events in their contracts. Contracts that include a clause that includes pandemics or epidemics, or that includes a scenario otherwise caused by COVID-19 and included in the force majeure clause, would have a strong legal argument for non-performance of a contract.

Many precedents have created elements that are also not considered cases of force majeure. This includes economic downturns. Both of these ideas are relevant when it comes to determining how COVID-19 will be treated for contractual purposes. And between the concept that unforeseen weather events are an act of God and that economic downturns are not, there is a range of circumstances that are a little more difficult to determine. Do I expect more people to pay attention and invoke force majeure? Yes, I think so. This is a concept that few people really thought of before the pandemic.â There are a limited number of cases where “force majeure” has been considered. Of those that do, “force majeure” is mainly considered in the context of: (1) the legal exemption from “force majeure” granted to ordinary carriers (i.e. in the context of a ship); or (2) force majeure as a defense against claims for negligence and not under an FM clause.

Today, “act of God” is defined as an “overwhelming and inevitable event caused solely by forces of nature such as an earthquake, flood, or tornado.” Act of God, Black`s Law Dictionary (11th edition 2019). There is no recent case law on whether the term “force majeure” covers a pandemic or epidemic (e.B H1N1 in 2009 or Ebola in 2014). On the one hand, courts may conclude that the occurrence of these previous global health crises has made COVID-19 predictable, which goes beyond the scope of a force majeure clause in many jurisdictions. On the other hand, the courts may conclude that the profound effects of COVID-19 bring it to a different scale than previous health crises and are therefore covered by collective language. What is clear, however, is that the term “act of God” will gain prominence in the post-COVID-19 world. If your company is involved in business disputes related to the pandemic and contracts, it`s a good idea to contact the professionals at Grellas Shah to find the best way to find your best way in these unprecedented times. Nevertheless, the longer the pandemic lasts, the more Lam expects more organizations and individuals to take a closer look at the leverage their contracts could provide. Is the coronavirus (COVID-19) pandemic a “case of force majeure”? This may seem like a philosophical or theological question – but it is most likely a legal issue. What for? Because the occurrence of a case of force majeure can extinguish the liability of a party in breach of contract. An appointment as force majeure can be legally significant in the following ways: Nikki Rudachyk, Saskatoon partner at McKercher LLP, said it is “rare” to see pandemics listed as an example of force majeure in Canada […].